Bitdeer Stock Drops 20% as ASIC Development Leads to Half a Billion Loss

The Singapore-based Bitcoin miner Bitdeer saw its stock drop on Tuesday, after disclosing a fourth-quarter loss of $532 million amid its push to develop proprietary mining chips.

The company’s share price had fallen 20% by Tuesday morning New York Time, hitting a three-month low of around $11.50 on the Nasdaq.

While the company said its power capacity exceeded 2.6 gigawatts (GW) in the fourth quarter, the firm is taking a distinct approach to its feet of power-hungry machines. The machines, mining rigs, are the hardware crypto miners use to constantly crunch complex calculations to verify transactions and earn Bitcoin block rewards.

Bitdeer is developing its own line of application-specific integrated circuits, or ASICs, that are specifically designed for mining Bitcoin. In the fourth quarter, the company said it began mass production of its SEALMINER A1 Bitcoin mining hardware.

The company’s fourth-quarter revenue came in at $69 million compared to $115 million a year ago. Bitdeer said the figure was influenced heavily by Bitcoin’s halving last year, a preprogrammed event that slashes Bitcoin rewards in half around every four years.

In a space dominated by Bitmain’s line of so-called antminers, Bitdeer believes it can become a “leading supplier of the world’s most energy efficient mining ASICs.” In the fourth-quarter, the firm said it entered the final stage of designing its second and third generation mining chips.

The company reported $23 million in research and development costs compared to $8.3 million a year ago, citing higher engineering costs stemming from its ASIC development roadmap.

Even though the firm’s financial performance was impacted by the development of proprietary Bitcoin mining chips, Bitdeer’s Chief Business Officer Matt Kong said the endeavor has “strengthened our competitive moat” compared to other Bitcoin mining companies.

“Owning and deploying our own mining ASICs is an integral part of our full vertical integration strategy,” he said in in a press release, underscoring a “dramatically improved supply chain compared to the broader industry” as one notable advantage.

Meanwhile, stablecoin giant Tether holds a 25% stake in the Singapore-based mining firm, according to an SEC filing last June. At the time, Bitdeer’s stock was trading hands around $7.15.

Bitdeer on Tuesday disclosed a $414 million loss due to changes in the value of convertible notes issued last year. Leveraged by the Bitcoin-buying firm Strategy, convertible notes are company debt that can be converted into shares by a buyer.

Bitdeer said that so-called warrants with Tether, which lets the stablecoin giant purchase Bitdeer shares at a specific price on a specific date, yielded a $56 million loss due to changes in their value.

As the price of Bitcoin soared last November on the back of President Donald Trump’s White House win, JP Morgan highlighted Bitdeer as a major beneficiary. The company's stock price jumped 83% that month amid a strong performance for other Bitcoin miners.

Despite headwinds from the halving, Bitdeer’s stock has rallied 63% over the past year. In January, the miner’s stock hit an all-time high of $26.99 per share, according to Yahoo Finance.

Edited by Stacy Elliott.